Paper Stock Companies Positioned for Growth: Three Names Worth Monitoring

The packaging sector continues to attract investor attention as multiple structural tailwinds reshape the competitive landscape. Three paper stock companies—Packaging Corporation of America (PKG), AptarGroup (ATR), and Greif, Inc. (GEF)—are emerging as compelling opportunities within this expanding industry segment.

The Case for the Containers and Packaging Sector

Digital commerce represents a fundamental growth driver. Global e-commerce transactions reached $5.8 trillion in 2023 and are forecasted to climb to $8 trillion by 2027, expanding at an 8.4% compound annual growth rate. In the U.S. specifically, the market expanded to $669.5 billion last year and is anticipated to exceed $1 trillion by 2027, climbing toward $1.145 trillion by 2029. This trajectory creates substantial demand for protective and reliable packaging solutions across consumer products, pharmaceuticals, chemicals, and industrial applications.

Equally significant is the structural shift toward eco-conscious materials. Companies throughout the paper stock industry are responding to heightened environmental consciousness by incorporating recycled content into manufacturing processes. This transition simultaneously addresses regulatory pressures and captures growing consumer preference for sustainable options. The industry’s pricing power has also improved, allowing manufacturers to offset raw material inflation, labor constraints, and transportation disruptions that have pressured margins.

Individual Stock Assessments

AptarGroup demonstrates particular strength in high-growth segments. The company’s Beauty division benefits from accelerating demand across personal care and cosmetics, while its Pharma operations are capturing steady growth in prescription and consumer healthcare products. Management’s expansion of elastomer component capacity and active material science capabilities positions the stock for near-term momentum. Over the trailing twelve months, shares gained 22.7%. Consensus earnings estimates for fiscal 2024 have been lifted 2.8% over the past two months, suggesting 8.6% year-over-year expansion. With a trailing four-quarter earnings surprise averaging 7.8%, the company carries a Zacks Rank #2 (Buy) designation and a projected long-term growth rate of 7%.

Packaging Corporation of America benefits from commanding market exposure to fast-growing channels. Its packaging segment, representing approximately 91% of revenues, has captured robust demand momentum from e-commerce fulfillment alongside stable consumption in food, beverage, and pharmaceutical packaging. Fourth-quarter containerboard sales volumes expanded 88,000 tons year-over-year. Management flagged expectations for increased corrugated shipments throughout 2024 amid sustained order backlogs. Share performance has been particularly strong, delivering 40% returns over the past year. The consensus earnings estimate for the current year has moved 2% higher in recent weeks, while the company averages a 10.1% earnings surprise on a trailing four-quarter basis. At an estimated long-term growth rate of 5%, the stock currently carries a Zacks Rank #3 (Hold).

Greif has pursued an aggressive capital deployment strategy. Recent acquisitions have systematically expanded its product portfolio and geographic reach. In October 2023, the company acquired IPACKCHEM, a specialized producer of premium barrier containers, followed by the purchase of Reliance Products in Canada. Earlier, Greif acquired a controlling stake in ColePak, adding paper partition capabilities to its converting operations. These transactions have enhanced barrier technology offerings and integrated containerboard operations. The company simultaneously implemented cost discipline and announced pricing increases to protect profitability. Shares have gained 4% over the past year, though consensus expectations have shifted notably higher, with earnings estimates revised 13.6% upward over the past two months. The company records a remarkable 150.6% trailing four-quarter earnings surprise on average, carries a projected 10% long-term growth rate, and holds a Zacks Rank #3.

Valuation and Market Context

The Containers - Paper and Packaging industry ranks #93 on the Zacks Industry Ranking system, placing it in the top 37% of tracked sectors. Forward twelve-month EV/EBITDA ratios currently stand at 19.66x compared to 12.25x for the broader S&P 500 and 18.54x for the Industrial Products sector. Over five years, the multiple has ranged from 10.96x to 30.08x, with a median of 18.57x.

While the sector has underperformed the S&P 500 over the past year—gaining 9.1% versus the index’s 32.1%—this presents potential opportunity for patient investors. The industry’s exposure to essential consumer-oriented markets, combined with secular shifts toward e-commerce and sustainable materials, suggests sustained demand regardless of broader economic cycles.